Loan Forgiveness Calls

The U.S. Small Business Administration released a one-page form aimed at simplifying the process of applying for the forgiveness of Paycheck Protection Program loans, together with revised and updated forms to meet the requirements of the most recent stimulus legislation. 

The COVID-19 relief package that Congress passed last month revived the PPP with $284 billion in funds for small businesses that want forgiveness loans to help them to deal with the effects of economic collapse of the coronavirus epidemic. The law requires that the SBA issue simplified forms within the first 24 hours of the signing into law. This is to make it easier to apply for forgiveness. The legislation also contained conditions that would encourage community banks to make more loans specifically to minority-owned companies that had difficulty getting loans last year.

Loan Forgiveness Calls

Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, stated that the Small Business Administration fulfilled the obligation to issue the PPP form, which is one page long, for loan forgiveness within 24 days from the date of enactment in the Consolidated Appropriations Act, 20,21. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published more updated forms.”

First Draw PPP Conditions for loan forgiveness

Loan Forgiveness Calls – For those who qualify, First Draw PPP loans can be qualified to forgive loans. This is when the loan is disbursed within an 8 to 24-week timeframe.

  • Pay and worker levels are ensured
  • The proceeds from the loan may be used to pay the cost of payroll as well as other expenses that are eligible.
  • A minimum of 60% of profits are spent on payroll costs

Second Draw PPP Conditions for loan forgiveness

Second Draw PPP loans for eligible borrowers can be eligible for loan forgiveness when the loan is repaid within an 8 24-week period.

  • The First Draw PPP loan requires that the employee and compensation levels be maintained in an exactly the same manner.
  • The proceeds of the loan could be used to cover payroll costs or other expenses that are eligible.
  • A minimum of 60% of profits are spent on payroll costs
  • How and when to apply for loan forgiveness

The borrower is eligible for forgiveness after all loan proceeds to which the borrower is requesting forgiveness have been utilized. The borrower can apply for forgiveness at any time until the date of maturity. If the borrower does not apply for forgiveness within 10 years of the date of expiration of the covered period the PPP loan payments can not deferred any longer, and borrowers will begin making monthly payments to their PPP lender.

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Gallery of Loan Forgiveness Calls

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